Disclose track record of public issues: Sebi to merchant banks

With a view to enable investors to take well-informed investment decisions, market regulator the Securities and Exchange Board of India (Sebi) today directed merchant bankers to disclose the track record of the performance of the public issues managed by them.

In a circular, the regulator said the decision has been taken after consultation with merchant banks.

"...It has now been decided in consultation with the merchant bankers that they shall disclose the track record of the performance of the public issues managed by them," it said.

Sebi further added: "The track record shall be disclosed for a period of three financial years from the date of listing for each public issue managed by the merchant banker."

It also said that the track record will have to be disclosed on the website of the merchant banker and a reference to this effect shall be made in the offer documents of public issues managed in the future.

"In case more than one merchant banker is associated with a public issue, all merchant  bankers who have signed the due diligence certificate, as disclosed in the offer document, shall disclose the track record," it said.

According to the regulator, it is necessary for investors to evaluate the post-issue performance of the issuer in terms of disclosures made in the offer documents.

"This will also enable them to understand the level of due diligence exercised by the merchant bankers," Sebi said.

It said the new rule will come into force with immediate effect.